Silver v. Cpc-Sherwood Manor, Inc.

• Decision Date: 19 December 2006
• Docket Number: No. 102,632.,102,632.
• Citation: 2006 OK 97,151 P.3d 127
• Parties: Frank J. SILVER, Plaintiff/Appellant, v. CPC-SHERWOOD MANOR, INC., a foreign corporation, Defendant/Appellee.
• Court: Oklahoma Supreme Court

151 P.3d 127

2006 OK 97

Frank J. SILVER, Plaintiff/Appellant, v. CPC-SHERWOOD MANOR, INC., a foreign corporation, Defendant/Appellee.

No. 102,632.

Supreme Court of Oklahoma.

December 19, 2006.

On Certiorari to the Court of Civil Appeals, Division I.

¶ 0 Plaintiff brought a claim for wrongful discharge in violation of public policy against defendant nursing home. During the course of the litigation, the defendant allegedly discovered that plaintiff had been convicted of robbery and aiding and abetting a murder. The defendant moved for summary judgment arguing that it should be relieved of all liability because the plaintiff was statutorily prohibited from employment in a nursing home under 63 O.S.2001, § 1-1950. The trial court granted the defendant's motion and entered judgment in the defendant's favor. The Court of Civil Appeals affirmed the judgment. This Court granted certiorari.

COURT OF CIVIL APPEALS' OPINION VACATED; TRIAL COURT'S JUDGMENT REVERSED; CAUSE REMANDED.

Jonathan E. Shook, James E. Erwin, Shook, Huggins & Johnson, P.C., Tulsa, OK, for the plaintiff/appellant.

Laurence L. Pinkerton, Judith A. Finn, Pinkerton & Finn, P.C., Tulsa, OK, for the defendant/appellee.

Mark Hammons, Jeff A. Lee, Hammons & Associates, Inc., Oklahoma City, OK, for amicus curiae Oklahoma Employment Lawyers' Association.

TAYLOR, J.

I. ISSUES

¶ 1 The dispositive question before this Court is whether the after-acquired evidence doctrine has no effect on damages, limits damages, or bars liability in an action for wrongful termination in violation of public policy. We answer in cases of wrongful termination in violation of public policy when the employee is not statutorily disqualified from the employment, the after-acquired evidence doctrine limits compensatory damages rather than bars all liability.

II. STANDARD OF REVIEW

¶ 2 This is an appeal from the trial court's grant of summary judgment in favor of the defendant. The trial court ruled that as a matter of law the plaintiff's claim for wrongful termination in violation of public policy is barred by the after-acquired evidence doctrine. We review questions of law under a de novo standard. Fowler v. Norman Municipal Hospital, 1991 OK 30, ¶ 6, 810 P.2d 822, 824.

III. FACTS AND PROCEDURAL HISTORY

¶ 3 This is the second time that this action has been before this Court. See Silver v. CPC-Sherwood Manor, Inc., 2004 OK 1, 84 P.3d 728 (Silver I). Silver was hired as a cook at CPC-Sherwood Manor, Inc. (nursing home). On December 9, 2001, while at work, Silver developed diarrhea and began vomiting. He allegedly was fired for leaving work to seek medical attention. Silver sued for wrongful termination, alleging he was fired in violation of public policy as reflected in the State Department of Health's rules. The nursing home filed a motion to dismiss, which the trial court granted, and Silver appealed. In Silver I, this Court granted certiorari; found Silver had stated a claim for wrongful termination in violation of the public policy based on title 63, sections 1-1102(a) and (c) and 1-1109(a)(4); reversed the trial court's judgment; and remanded the cause to the district court. Id. ¶ 7, 84 P.3d at 730.

¶ 4 On remand, the nursing home filed a motion for summary judgment based on the after-acquired evidence doctrine. As an undisputed fact in its motion for summary judgment, the defendant asserted that Silver had been convicted of and imprisoned for the crimes of robbery and of aiding and abetting a murder. The defendant averred that if it had known of Silver's criminal record, it would have terminated him or could not have hired him based on the Oklahoma Nursing Home Care Act, 63 O.S.2001, § 1-1950(F)(2). The defendant argued that under the facts and the after-acquired evidence doctrine, Silver's conviction acted as a complete bar to his claims. Silver did not dispute that he had been convicted of the crime of accessory before the fact to murder but argued the Oklahoma Nursing Home Care Act does not mandate his termination and the after-acquired evidence doctrine does not bar all relief.

¶ 5 The district court granted the defendant's motion for summary judgment. The Court of Civil Appeals affirmed the district court's judgment. The Court of Civil Appeals held that Silver's conviction, discovered after the nursing home terminated his employment, was a complete bar to his claim for relief for wrongful termination in violation of public policy. This Court granted certiorari.

IV. ANALYSIS

¶ 6 This Court has not previously decided the effect of the after-acquired evidence doctrine in cases of wrongful termination. The Colorado Supreme Court has stated the general rule: under the after-acquired evidence doctrine, an employee's relief for wrongful discharge may be barred or limited by the employer's post-discharge discovery of an employee's wrongdoing. Crawford Rehab. Servs., Inc. v. Weissman, 938 P.2d 540, 547 (Colo.1997). The after-acquired evidence doctrine is based on the idea "that an employee cannot complain about being wrongfully discharged because the individual is no worse off than he or she would have been had the truth of his or her misconduct been presented at the outset." Gassmann v. Evangelical Lutheran Good Samaritan Soc'y, Inc., 261 Kan. 725, 933 P.2d 743, 746 (1997).

¶ 7 In support of its position that the after-acquired evidence doctrine precludes all recovery by Silver for wrongful termination, the nursing home relies on Summers v. State Farm Mut. Automobile Ins. Co., 864 F.2d 700 (10th Cir.1988); Washington v. Lake County, Illinois, 969 F.2d 250 (7th Cir.1992); and Mathis v. Boeing Military Airplane Co., 719 F.Supp. 991 (D.C.Kan.1989).¹ The holdings in these cases were abrogated by McKennon v. Nashville Banner Publ'g Co., 513 U.S. 352, 115 S.Ct. 879, 130 L.Ed.2d 852 (1995), and, thus, are no longer cogent authority.

¶ 8 Courts recognize the after-acquired evidence doctrine either as a bar to an employer's liability or as a limit on the remedy. Teter v. Republic Parking Sys., Inc., 181 S.W.3d 330 (Tenn.2005); see McKennon, 513 U.S. at 352, 115 S.Ct. 879; Crawford Rehab. Servs., Inc., 938 P.2d at 540. To the extent courts have held that the after-acquired evidence doctrine bars all relief, with few exceptions, the claims in the cases were based on an employment contract and did not raise public policy concerns. See Teter, 181 S.W.3d at 339; Crawford Rehab.Servs., Inc., 938 P.2d at 540 (Colo.1997); McDill v. Environamics Corp., 144 N.H. 635, 757 A.2d 162, 166 (2000). Courts reason that under principles of contract law, the employee's breach of contract excused the employer's later breach. Crawford Rehab.Servs., Inc., 938 P.2d at 540; McDill v. Environamics Corp., 144 N.H. 635, 757 A.2d 162, 166 (2000).

¶ 9 When the employee's claim of wrongful termination is based on a violation of public policy, courts are reluctant to bar recovery but generally apply the after-acquired evidence doctrine to limit relief. See McKennon, 513 U.S. at 360-361, 115 S.Ct. 879; McDill, 757 A.2d at 166; Camp v. Jeffer, Mangels, Butler & Marmaro, 35 Cal. App.4th 620, 41 Cal.Rptr.2d 329 (1995). The issue in McKennon was whether "all relief must be denied when an employee has been discharged in violation of the [Age Discrimination in Employment Act of 1967 (ADEA), 81 Stat. 602, as amended, 29 U.S.C. § 621 et seq. (1988 ed. and Supp. V),] and the employer later discovers some wrongful conduct that would have led to discharge if it had been discovered earlier." 513 U.S. at 355, 115 S.Ct. 879. The Court first stressed the common purposes of federal anti-discrimination statutes as deterrence and compensation. Id. at 358, 115 S.Ct. 879. The deterrent purpose, the Court noted, would not be served if the after-acquired evidence doctrine allowed an employer to escape liability in every case. Id. The Court also noted that the employee, in seeking to redress his or her own injuries, preserves the underlying congressional policy against discriminatory practices. Id.

¶ 10 In fashioning a rule, the McKennon Court determined that after an employer establishes that it would have discharged the employee based on the after-acquired evidence, reinstatement and front pay, which is pay after the discovery of the employee's wrongful conduct, would not be appropriate remedies. 513 U.S. at 361, 115 S.Ct. 879. However, evidence of the employee's wrongdoing would be relevant to the measure of damages. Id. The Court concluded that the remedy should be based on "backpay from the date of the unlawful discharge to the date the new information was discovered." Id. at 362, 115 S.Ct. 879. The Court rejected an absolute rule barring all recovery because it would undermine the ADEA's objectives. Id.

¶ 11 In response to federal certified questions, the Arizona Supreme Court answered the questions of whether the after-acquired evidence doctrine applies and how it limits or precludes damages in cases of wrongful termination in violation of public policy and in cases for breach of an employment contract. O'Day v. McDonnell Douglas Helicopter Co., 191 Ariz. 535, 959 P.2d 792 (1998). The O'Day court answered "that after-acquired evidence is a defense to a breach of contract action for wages and benefits lost as a result of discharge if the employer can demonstrate that it would have fired the employee had it known of the misconduct." Id. at 796.

¶ 12 Addressing the after-acquired evidence doctrine in cases of wrongful termination in violation of public policy, the O'Day court recounted the three approaches: (1) after-acquired evidence "is not admissible because it is irrelevant or because it undermines the public policy goals" advanced by a wrongful termination action, (2) the after-acquired evidence doctrine is a complete bar to relief, and (3) the after-acquired evidence doctrine only limits relief. Rejecting the first approach, the court determined that it was irreconcilable with the employer's right to discharge...